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HMRC internal manual

Tobacco: Control of Supply Chains

HM Revenue & Customs
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Penalty notices: Factor 8 - Potential loss of duty and VAT on notified seizures during the six month period following the issuing of an initial notice. Maximum score 20 points.


This factor is scored on the potential duty and VAT that would have been due on the notified seizures:

Potential revenue loss

£1 to £3 million Score up to 5
Over £3 million to £6 million Score up to 10
Over £6 million Score up to 20

Summary of factors 1- 8

No. Brief description Max points
1 Breach of duty not to facilitate smuggling 25
2 Action taken to ensure compliance with duty 10
3 & 4 Supply chain policy (content and compliance) 15
5 Action on specified brands and countries 5
6 Information on specified brands and countries 5
7 Notified seizures (number size and nature) 20
8 Potential loss of duty and VAT. 20
1- 8 Total factors 1 - 8 100

The maximum non-compliance score from the total of all 8 factors is 100 points. The basic penalty is thus calculated by expressing the computed non-compliance score as a fraction of 100 and multiplying this by the maximum penalty of £5 million.